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EghtesadOnline: The payment regulator has suspended services to three million POS terminals and online payment gateways after the users failed to abide by tax rules required by the Iranian National Tax Administration.

“Blocked payment tools are out of a total six million POS terminals whose owners are not identified taxpayers by the INTA,” Mahmoud Alizadeh, the INTA deputy chief for legal affairs, told state TV.

The measure is in the framework of law to tax transactions via POS terminals and payment gateways, which came into effect in mid-January. As such, businesses wanting to apply for POS or other payment gateways have to first file their tax returns and those who already own the gadgets are automatically liable to pay tax.

The new rules seek to improve INTA’s supervision on transactions to curb tax evasion and fraud particularly in the high income brackets like lawyers, physicians and realtors many of them infamous for evading tax.

The measures are also designed to curb illegal activities using rented payment gateways. The central bank is hopeful that the measures will help the regulator in controlling money laundering and online betting because owners of the gateways are accountable and must pay tax.

Earlier Mehran Maharamian, the CBI vice governor for IT affairs, said the new rules would “significantly curb” illegal activities using rented payment gateways.

"It will play a key role in controlling illegalities, mainly money laundering and online betting because owners of the gateways are responsible and must pay tax.”

Tax officials emphasize that interaction between INTA and the Central Bank of Iran is crucial to fight tax evasion by monitoring e-transactions. This is because control over POS devices is beyond INTA’s purview and is the responsibility of Shaparak, the nationwide electronic payment settlement network affiliated to the CBI.

The proposal to tax POS transactions became law two years ago but has gone through adjustments ostensibly due to technical issues.

With persistent reports of rising tax evasion and ineligible tax exemptions, governments have been struggling to curb rampant tax dodging.

Economists have regularly called for major reforms to the tax regime including compelling major state-affiliated economic organizations and conglomerates to pay tax.